When you are selling a house or a commercial building, there are several things to consider when thinking about the right price to ask. You would get a real estate agent and they would help you find the appropriate market value and then adjust that based on the condition. A home inspection will help in this adjustment, but after that, it is fairly straight forward about setting the price. When you have to consider a different question, such as how to determine your business selling price, it is more complicated.
If it were just selling the building, again, the value of the property can be determined and negotiations with the buyer can begin. At issue is the sale of more than just a physical site. You must determine how much the entire enterprise is worth. When you sell this entity, you are selling a building, the name, the existing stock and the future value of the business. It is interesting how you arrive at this figure, so a quick look at the components is critical.
The building, again, is easy to figure out. The stock on the shelving, including any materials to be used to build products, must be looked at and current replacement value must be listed. This can be provided by looking at the price sheets you have from current vendors. Add this to the value of the building.
The total amount of liabilities you have will have to be deducted from any value you have figured out. The liabilities are the bills that are still currently owed to anyone associated with the business. This means current invoices from vendors or municipal services.
Other positive values will include any accounts receivable. Invoices that are out there that are currently unpaid. This represents value to the new owners. These must be aged and verified to weigh their relative values based on the expectation of getting paid. These should be overall positive in nature for the prospective buyer.
Good will is what your reputation is called. This is the name that people have learned to trust over the years. It is an asset that must be computed by professionals who know the industry and the market in the area. A very large portion of the true value is based on the new owners ability to make money, based almost solely on that reputation until they get a chance to make their own.
All of these computations may take a while to accomplish. This is one of the reasons that hiring a company that does this is a great idea. You will need them to ask you all of the questions that need to be asked to unearth the important answers. These questions and the answers are some things that you usually do not think about during normal day to day operation but are crucial in this period.
You are looking to sell your business, not just the building, but your whole enterprise, lock stock and barrel. You will be surprised at the total value when you get it all listed out on the proposal sheet. You want maximum profit from this transaction, so you must find everything of value and charge for everything there, including the intangibles many people do not consider of value.
If it were just selling the building, again, the value of the property can be determined and negotiations with the buyer can begin. At issue is the sale of more than just a physical site. You must determine how much the entire enterprise is worth. When you sell this entity, you are selling a building, the name, the existing stock and the future value of the business. It is interesting how you arrive at this figure, so a quick look at the components is critical.
The building, again, is easy to figure out. The stock on the shelving, including any materials to be used to build products, must be looked at and current replacement value must be listed. This can be provided by looking at the price sheets you have from current vendors. Add this to the value of the building.
The total amount of liabilities you have will have to be deducted from any value you have figured out. The liabilities are the bills that are still currently owed to anyone associated with the business. This means current invoices from vendors or municipal services.
Other positive values will include any accounts receivable. Invoices that are out there that are currently unpaid. This represents value to the new owners. These must be aged and verified to weigh their relative values based on the expectation of getting paid. These should be overall positive in nature for the prospective buyer.
Good will is what your reputation is called. This is the name that people have learned to trust over the years. It is an asset that must be computed by professionals who know the industry and the market in the area. A very large portion of the true value is based on the new owners ability to make money, based almost solely on that reputation until they get a chance to make their own.
All of these computations may take a while to accomplish. This is one of the reasons that hiring a company that does this is a great idea. You will need them to ask you all of the questions that need to be asked to unearth the important answers. These questions and the answers are some things that you usually do not think about during normal day to day operation but are crucial in this period.
You are looking to sell your business, not just the building, but your whole enterprise, lock stock and barrel. You will be surprised at the total value when you get it all listed out on the proposal sheet. You want maximum profit from this transaction, so you must find everything of value and charge for everything there, including the intangibles many people do not consider of value.
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If you would like to know how to determine your business selling price come and discuss this further with one of our expert brokers. Find our website that discloses all the info on http://www.businessbrokerexpertsinc.com/steps-in-selling.
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